Refinance Calculator
Find out if refinancing pays off and when you break even.
When refinancing makes sense
Refinancing replaces your mortgage with a new one, usually to get a lower rate. The saving each month has to repay the costs of refinancing, so the key figure is the break-even point: the number of months until the savings cover the costs.
Example
A 250,000 balance at 7% with 27 years left costs about 1,720 a month. Refinancing to 5.5% over 30 years with 4,000 of costs lowers the payment to about 1,419, saving about 300 a month and breaking even in 14 months. Total payments over the two loans fall by about 42,000.
Stretching the term back out to 30 years lowers the payment but can raise the total interest. Compare the “total cost” line as well as the monthly saving, and only refinance if you plan to stay past the break-even point.
Frequently asked questions
How low must the rate be?
There is no fixed rule. Work out the break-even point, and make sure you will stay in the home for longer than that.
Should I roll the costs into the loan?
It saves cash now but you pay interest on the costs. The calculator shows both.
Last updated